6. Hon TONY RYALL (National—Bay of Plenty) Link to this
to the Minister of Health
Did the chief executive of Hawke’s Bay District Health Board comply with both the district health board’s procurement policies and public sector good practice when he awarded a $1.1 million contract to a subsidiary of Peter Hausmann’s Healthcare New Zealand without an open tender; if not, does he agree with Audit New Zealand’s conclusions about this arrangement?
Hon DAVID CUNLIFFE (Minister of Health) Link to this
I am advised that the Wellcare contract in question was a joint contract between the Ministry of Social Development, Hawke’s Bay District Health Board, and Wellcare, and that no district health board employee was known to be involved in the selection of Wellcare as the service provider. However, I have no reason to doubt the Auditor-General’s conclusion that procurement policies at the Hawke’s Bay District Health Board did not comply with good public sector practice. I also note that the Auditor-General will consider the results of the director-general’s review, and any further work being carried out on the Auditor-General’s behalf, before deciding whether further inquiry is warranted—an approach I commend to Mr Ryall.
Can the Minister confirm that Audit New Zealand’s opinion is highly critical of the way that the chief executive handled this latest contract with Annette King’s appointee Mr Hausmann, and that there was no evidence of formal conflict of interest procedures having been undertaken, the district health board’s procurement policies were not followed, and there was no documented explanation of why there was no open tendering process?
Hon DAVID CUNLIFFE Link to this
I can confirm that the Auditor-General’s report is highly critical of a wide range of governance processes around the Hawke’s Bay District Health Board, a matter which, in the end, the Minister has to hold the board accountable for.
Russell Fairbrother Link to this
Has the Hawke’s Bay District Health Board prudently managed its resources, and is the district health board adequately funded?
Hon DAVID CUNLIFFE Link to this
I am advised that the Hawke’s Bay District Health Board funding has increased by over 100 percent since this Government came into office, from $180 million to over $380 million. However, despite this increase the board was still unable to reach a break-even position, and its deficit has recently seriously deteriorated. In this regard, I note that the board was recently able to spend some $342,000 on legal expenses—a figure, I am assured, that would have bought for the people of Hawke’s Bay some 21 hip replacements or 45 angioplasties.
Chris TremainCan the Minister explain why Minister King’s appointee Mr Hausmann told the Hawke’s Bay District Health Board in April 2006 that this $1.1 million contract had been implemented through a tender process that had been notified in the local press, when this was clearly not the case?
Hon DAVID CUNLIFFE Link to this
Without going back to the documents, I can no more explain that than I can explain why certain board members omitted to disclose on the board’s register of pecuniary interests why they had shares in Royston Hospital or its parent.
Craig FossCan the Minister explain why Mr Hausmann started communicating with Hawke’s Bay District Health Board staff on behalf of his company, Wellcare, in early August 2005, but only declared his interest in this company to the district health board in late February 2006—7 months after his first dealings with staff?
Hon DAVID CUNLIFFE Link to this
I am not prepared to look through the director-general’s governance review process. I imagine that that, along with a wide range of other evidence, is the subject of that review.
Is it acceptable for a district health board’s chief executive officer to approve a $1.1 million contract with a board member’s company without an open process, and without reference to his board, as reported by Audit New Zealand and the Auditor-General; and is the Minister confident that this is not another case of something rotten with Labour?
Hon DAVID CUNLIFFE Link to this
In the first place, it has nothing to do with Labour, and, in the second place, it would appear to be no more serious than the chairman of a district health board being involved in letting a contract to personal contacts and having that overruled by the Commerce Commission, or overwriting the minutes of an audit committee meeting after failing to tender a contract to Royston Hospital.
I seek leave to table the district health board’s minutes where the chief executive officer said that the Wellcare contract was put out to tender.
Hon DAVID CUNLIFFE Link to this
I seek leave to table a settlement document from Deborah Houston confirming that she was not disestablished for any reason around the—